Update: It passed the House on April 4, 209-146, It will still have to go to the state Senate and the governor’s desk.
Being a tourist destination can be good for business but hard on roads and other municipal services, which is why the legislature may let towns and cities collect an extra $2 a night from many hotel rooms, including rooms rented in private homes via online services like Airbnb.
Under the proposed law, which will be subject to a vote in the House on Thursday, communities could decide to impose the fee on hotel rooms in their community and use it “to augment funding for the cost of municipal services associated with the increase in tourism and transient traffic.”
Concord has between 600 and 800 hotel rooms, depending on whose figures you accept. Using a figure of 700, if every room is rented out half the days of the year, which is the low end of the nation’s average occupancy rate for hotels, a $2-per-night charge could bring the city a quarter-million dollars annually.
That doesn’t include in-home rentals through companies like Airbnb, HomeAway and VRBP. It’s not clear how many such rooms are offered in the city or how often they are occupied, although they probably wouldn’t add much to the total tally.
While New Hampshire has a long history of collecting money from visitors via fees and taxes, this proposal is unusual because the fee could vary from town to town – or not be collected at all – and the money could be used only within the community that collects it.
The idea has drawn predictable industry response. It is supported by the New Hampshire Municipal Association, whose members would get extra income, and opposed by the New Hampshire Lodging and Restaurant Association, whose members would have to charge the fee to their customers.
The bill as amended by the House Ways and Means Committee says a fee can be imposed on each “occupancy” and references the state law regarding the rooms and meals tax, which applies to in-home rentals via Airbnb and other online companies. As a result, said Cordell Johnston, government affairs counsel for the N.H. Municipal Association, any optional fee would also apply to in-home rentals.
Airbnb was noncommittal on the proposal. “While we are continuing to review this legislation, we have been collecting and remitting taxes to the state of New Hampshire since November 2017 and look forward to continuing to build on that partnership,” it said in a statement.
A vote on the bill is scheduled for Thursday in the House of Representatives.
The proposed fee would not apply to rooms that cost less than $40 a night. It would allow communities to charge a fee that is a percentage of the room cost, as long as that fee doesn’t exceed $2 per night.
The bill, House Bill 641, is a type of enabling legislation, meaning that it would allow communities to impose the fee but would not require it. A vote of each city council or town meeting would be required.
Airbnb claims that 3,500 people in New Hampshire in the state as a whole rented out rooms in 2018 through that service and hosted “more than 200,000 guests.” The company said it paid $2.9 million in rooms and meals tax to the state, less than one personal of the total.
New Hampshire has more than 22,000 hotel rooms, according to industry figures. The rooms and meals tax brought in $314 million in the fiscal year 2017, the most recent year for which data is available.
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